July crude oil futures are in the process of posting an inside move on the weekly chart. To non-chart watchers, it means the market failed to produce a higher-high or a lower-low when compared to the previous week’s price action. To chart watchers, it may be an indication of investor indecision or impending volatility. It may also mean the market is in a transition that could be an indication that momentum is getting ready to shift to the downside.
The failure to make a higher-high didn’t come as a surprise because for several weeks I’ve been telling the readers that the week-ending June 3 is a critical week for timing. Earlier in the year, the market rallied eight weeks before forming a top that led to a three week decline. With the market balancing time the week-ending June 3, we could see the start of a similar break.
While most traders watch price, time is the most important indicator. A rally that exceeds a previous rally in terms of time is a strong market so if the market pauses this week then resumes the uptrend next week then we can conclude the buying is getting stronger. However, if the market starts to take out previous lows then we have to expect the start of at least a three week break.
(Click to enlarge)
According to our weekly swing chart indictor, the main trend is up. The market is in no danger of turning the main trend to down and based on Thursday’s price action, it isn’t even in a position to…